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Blog Archive June 2022


Turns out business banking isn’t so complicated.

Editors Note: While banks across the nation continue to merge at levels not seen since the 2008 financial crisis, Pan American Bank and Trust is proud to stay rooted in the community that has been pivotal to our growth for the past 15 years. 

While we continue to create new, adaptable solutions for your business banking needs, we relish our old-school, people-first approach that makes us a standout institution in Chicagoland and beyond. 

Learn more about who we are and how we approach business banking below. 

The road to $430 million.  

As the great recession prepared to rip across America, Frank Cerrone and Management approached Pan American Bank and Trust in 2007 with a vision to grow the humble bank into a flourishing resource for small businesses. Before this, he served as the Executive Vice President of the International Bank of Chicago, aiding in the expansion of its assets from $30 million to $200 million. In search of a new challenge, he ventured out to replicate this success in another $30 million institution and settled in as Pan American's new President. 

Despite financial unrest, the timing proved beneficial to Pan American's growth model. While big banks spent the next two years putting out massive fires, Cerrone and his business partner Nick Giuliano (now Pan American’s Chairman) focused on implementing practical yet useful services that would attract local entrepreneurs frustrated with cookie-cutter banks.

"We only had maybe $25 million in loans at the time, which was nothing compared to the other guys," says Cerrone. "We had the opportunity to concentrate on building our brand within the community."

What started as one bank in Little Village eventually grew to five locations, with its headquarters in Melrose Park – Cerrone's hometown. Not only has Cerrone replicated his success, but he exceeded it with the support of Giuliano and the Board – a diverse group of mission-driven entrepreneurs. Pan American Bank now has more than $400 million in assets and is still growing. 

"When someone walks into your home, you greet them; you make them feel welcome, you offer them something. That's how I was raised."  

Growth is a two-way street

Cerrone and Giuliano, both first-generation Italians, fuse the traditional values they grew up with into their approach to business banking–but with a modern twist. The goal? To make everyone who walks through Pan American's doors, both employees and clients, feel valued.

"When someone walks into your home, you greet them; you make them feel welcome, you offer them something," says Cerrone. "That's how I was raised." 

Finding a business bank, especially for newer entrepreneurs, can be daunting. That's why Pan American places great emphasis on being hospitable and accommodating. Both Cerrone and Giuliano draw on their own entrepreneurial journeys to help those beginning their own.   

"It's just the simple things. Just listening to someone and being available 24/7 means a lot to small businesses." 

While mega banks race to put out new apps with bells and whistles (that, quite often, nobody asked for), Pan American aims to be a reflection of its communities – down in the entrepreneurial trenches coming up with smart business solutions, together. 

With options like concierge banking (a banker will travel to your office or home to assist with your account) and direct access to decision-makers, clients can focus on growing their business on their own schedule. Because of these unique differentiators, they’ve built long last relationships with their clients. 

Since Cerrone became President & CEO 10 years ago, he's empowered his hiring managers to bring on staff who understand how these principles of adaptability and flexibility play a role in the bank's longevity. In return, he ensures everyone who works for the bank feels entrusted to make informed, autonomous decisions.

"It's about taking ownership," says Cerrone. "Ownership turns into accountability which turns into passion, and [employees] feel like they're running their own business, too. They feel valued." 

What's ahead: bringing along the old with the new

While reports show more than $50 billion in bank acquisition and merger deals since 2021, Pan American is laser-focused on its next big goal: hitting $500 million in assets. And though new banking features and benefits are underway (stay tuned), Cerrone and his team will stick to what's been working for the past 15 years:

"We're going to continue to exceed our client's expectations and think outside of the box to help people grow." 

Being accessible to business and personal banking clients has always been important, but it's exceptionally crucial now–with economic anxiety at an all-time high for many Americans. 

"This is not my job; it's my life. When I put my head on my pillow every night, I want to feel like I'm doing something valuable and making a difference. That's what keeps me going," Cerrone says. 


Roth IRA Tips Everyone Should Utilize*

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It is common knowledge that a Roth IRA (Individual Retirement Account) allows investors to contribute money that can grow without paying income taxes. The current limit for 2022 is $6,000 per year or $7,000 if you are over 50 years old. A Roth IRA can be opened with any financial institution or major brokerage firm. However, there are some tips that are not as well known that may contribute to the success of your Roth IRA. Let’s unveil these advantages so that you can maximize your IRA’s potential.

The first misconception is that funds used from the account must be used for retirement. Contributions and earnings can be accessed prior to retirement without the 10% penalty in specific instances. Some examples would be to pay for higher education or a first home, death, disability or medical expenses.

A second untapped advantage of using a Roth IRA is that credit can be attained for money put into the account. Called the Tax Saver’s Credit, up to 50% of the funds contributed can be tax savings if you earn less than $41,000  and file jointly. Married couples filing jointly can apply for a 10% credit if they earn between $41,001 and $68,000 per year or 20% if they earn between $41,000 and $44,000 annually.

Roth IRA contributors with children will appreciate this third tip. Generally, one must be 18 years old and have a taxed income to qualify for a Roth IRA. However, parents can establish custodial Roth IRAs for their dependent children, contributing their children’s earnings and controlling the IRA until they are of age. For instance, if your child has a job at age 16, working as a restaurant employee or salon assistant, their earnings can be partially or totally contributed into a Roth IRA in their name.

The benefit of being able to deduct contributions from your Roth IRA at any time, without paying a penalty, is also very important to know. Earnings must remain in the account for ongoing growth, but the ability to deduct contributed funds when needed is a reassuring financial security for life’s unexpected events.

Another perk of the Roth IRA is the Spousal Option. A married couple that files jointly and earns less than $204,000 can contribute the full amount of $6,000 each. Couples that earn between $204,000 and $214,000 have levels they must adhere to. Couples who earn over $214,000 cannot contribute to a Roth IRA.

If you happen to be in the latter earning category, there is still a way to have a Roth IRA. Adjustments were made to the Roth IRA rules in 2011 for this purpose. Those who earn over $214,000 can contribute to a traditional IRA or a non-deductible IRA. Once that is established, a Roth IRA conversion can be conducted, converting the funds into a Roth IRA. When doing this process, taxes must be paid on the money converted. Considering this, it may be best to do the conversion during a year when your tax rate is lowest, if possible. It may also be wise to have a tax professional guide you through the process.

Roth IRAs are a great tool to save for retirement because it offers tax free income upon retirement, a valid consideration since tax rates will be unknown at time of retirement. Compare the various financial institutions and brokerage firms that offer Roth IRA accounts before choosing one. You will have this account long term so you want to be comfortable and satisfied with your choice. Don’t take too long to decide though. The sooner you open a Roth IRA and begin contributing the better your retirement prospects will be.

*This article is not intended to be investment, tax or legal advice. Always consult a qualified investment, tax and/or legal advisor to assess investment, tax and legal implications. IRA’s held by brokerage firms are not FDIC insured.


HELOC Versus a Second Mortgage – Which is Right for You?

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The equity in your home can be used for many purposes. Equity can be used for improvements and repairs to maintain the home, or even to pay off debt or to purchase another property. To access the equity in a home without selling it, a HELOC (Home Equity Line of Credit) or Second mortgage can be applied for through a trusted lender or bank.

A HELOC is a revolving line of credit based on  your equity in your home. Typically, at least 20% equity in a home is needed for a HELOC. It offers flexibility and is utilized similarly to a credit card. The lender will establish a borrowing limit and interest rate. Rather than receiving a large sum, the borrower has access to a credit amount. The advantage of a HELOC is that you can decide exactly how much of the funds you’d like to use and pay interest only on the credit used. However, most HELOCs have variable interest rates which signifies varied payments that can increase over time. HELOCS are popular for home improvements. If the entire HELOC is not used, the remaining amount is still available for future projects. HELOCs are a great option if the amount needed for the project in question is undetermined.

Second mortgages utilize the equity in a home as collateral, similar to a HELOC. The primary difference is that a second mortgage provides funds as a lump sum to the borrower, not as a line of credit for the HELOC. The second mortgage also has fixed principal and interest payments which is beneficial if the borrower prefers a set payment schedule over the loan term. A second mortgage may be preferable if the borrower intends to pay back the funds over a longer period.

When filing taxes, the interest paid in both HELOCs and second mortgages can usually be deducted.* Before pursuing either option, carefully consider what the funds will be used for and the repayment plan for the credit used. Ultimately, both choices are an additional loan to your primary mortgage that must be repaid with your home as the collateral.

*Consult a tax advisor on the deductibility of interest.

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